Malaga Financial Corporation Reports Increased Earnings for the First Six Months of 2022

Rhea-AI Summary

Malaga Financial Corporation (OTCPink:MLGF) reported net income of $9,774,000 for the first six months of 2022, marking a 2% increase from $9,622,000 in the same period of 2021.

For Q2 2022, net income reached $4,979,000, a 1% increase year-over-year. The annualized return on average equity was 11.34% and return on average assets was 1.31%.

Net interest income increased by 3% to $10,120,000, driven by growth in interest-bearing assets. Retail deposits rose by $107.8 million to total $888.4 million.

Positive

• Net income for H1 2022 increased by $152,000 or 2%.
• Quarterly net income saw a $73,000 or 1% year-over-year increase.
• Net interest income increased by 3%, totaling $10,120,000.
• Retail deposits increased by $107.8 million or 14% year-over-year.

Negative

• Loan portfolio decreased by $14.1 million or 1% year-over-year.
• Operating expenses increased by 9% in Q2 2022.

PALOS VERDES ESTATES, Calif., July 15, 2022 (GLOBE NEWSWIRE) -- Malaga Financial Corporation “Company” (OTCPink:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the six months ended June 30, 2022 was $9,774,000 ($1.20 basic and fully diluted earnings per share) compared to $9,622,000 ($1.19 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on October 25, 2021) for the same period ended June 30, 2021, an increase of $152,000 or 2%. Net income for the quarter ended June 30, 2022 was $4,979,000 ($0.61 basic and fully diluted earnings per share), an increase of $73,000 or 1% from net income of $4,906,000 ($0.61 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on October 25, 2021) for the quarter ended June 30, 2021, and an increase of $184,000 or 4% from net income of $4,795,000 ($0.59 basic and fully diluted earnings per share) for the quarter ended March 31, 2022. For the first six months of 2022, the Company’s annualized return on average equity was 11.34% and the annualized return on average assets was 1.31%.

The increase in earnings of $73,000 for the second quarter of 2022 compared to second quarter of 2021 was primarily attributable to a $388,000 increase in net interest income after provision for loan losses, offset by a $285,000 increase in other operating expense, and a $31,000 increase in income tax expense.

Net interest income totaled $10,120,000 in the second quarter of 2022, an increase of $328,000 or 3% from the same period in 2021. This resulted primarily due to an increase in excess interest-bearing assets over interest-bearing liabilities of $12.6 million, offset by a decrease in the interest rate spread from 2.87% to 2.70%. The decrease in the interest rate spread is primarily attributable to a decrease of 0.22% in yield on average interest-earning assets offset by a decrease of 0.05% in yield on average interest-bearing liabilities.

Operating expenses increased 9% in the second quarter of 2022 to $3,316,000 from $3,031,000 in the second quarter of 2021.   The increase is primarily attributed to an increase in compensation of $189,000, office rent and utilities of $45,000, and general and administrative expenses of $37,000.

The Company had no 30-day delinquent loans or loans with deferred payments and no foreclosed real estate owned at June 30, 2022. The Company’s allowance for loan losses was $3,717,000, or 0.30% of total loans, at June 30, 2022.

Randy C. Bowers, Chairman, President and CEO, commented, “During this period of growing uncertainty about the economy we are pleased to report increased earnings for both the quarter and first half of 2022. As a result of the efforts of our colleagues, earnings continue to improve, asset quality remains excellent and expenses continue to be well controlled.”

Malaga Bank’s total assets increased by 9% to $1.519 billion at June 30, 2022 compared to $1.393 billion at June 30, 2021. The loan portfolio at June 30, 2022 was $1.223 billion, a decrease of $14.1 million or 1% from June 30, 2021. Malaga originates loans principally for its own portfolio and not for sale.

Malaga funds its assets with a mix of retail deposits, wholesale deposits and FHLB borrowings. Retail deposits totaled $888.4 million as of June 30, 2022, a $107.8 million increase from $780.6 million at June 30, 2021. Wholesale deposits increased $25.1 million or 16% from $157.9 million at June 30, 2021 to $183.0 million at June 30, 2022. Wholesale deposits are primarily comprised of State of California certificates of deposit in the amount of $60.0 million and $109.1 million of brokered long-term certificates of deposits as of June 30, 2022. FHLB borrowings decreased $20.0 million or 7% from $270.0 million at June 30, 2021 to $250.0 million at June 30, 2022.

As of June 30, 2022, Malaga Bank was in compliance with all applicable regulatory capital requirements and was deemed “well-capitalized” under applicable regulations. Core capital and risk-based capital ratios were 12.39% and 22.71%, respectively, at June 30, 2022, significantly exceeding the minimum “well-capitalized” requirements of 5% and 10%, respectively.

Malaga Bank, a subsidiary of Malaga Financial Corporation, is a full-service community bank headquartered on the Palos Verdes Peninsula with six offices located in the South Bay area of Los Angeles. Malaga Bank has been awarded an A+ financial health rating by DepositAccounts.com.   A more detailed breakdown of Malaga Bank’s A+ health score may be found in the health section of its dedicated page at www.depositaccounts.com/banks/malaga-bank-fsb.html#health. For over ten years Malaga Bank has been consistently recommended by one of the nation’s leading independent bank rating and research firms, Bauer Financial Inc. Malaga Bank was awarded Bauer’s premier Top 5-Star rating for the 58th consecutive quarter as of March 2022. Since 1985 Malaga has been delivering competitive banking services to residents and businesses of the South Bay, including real estate loan products custom-tailored to consumers and investors. As the largest community bank in the South Bay, Malaga is proud of its continuing tradition of relationship-based banking and legendary customer service. The Bank’s web site is located at www.malagabank.com.

Contact:	Randy Bowers
	Chairman of the Board, President and Chief Executive Officer
	Malaga Financial Corporation
	310-375-9000
	rbowers@malagabank.com

FAQ

What were Malaga Financial Corporation's earnings for Q2 2022?

Malaga Financial Corporation reported net income of $4,979,000 for Q2 2022.

How did net income for the first half of 2022 compare to 2021 for MLGF?

Net income for the first half of 2022 was $9,774,000, up 2% from $9,622,000 in the same period of 2021.

What was the annualized return on equity for Malaga Financial Corporation?

The annualized return on average equity was 11.34% as of June 30, 2022.

How much did retail deposits increase for MLGF in 2022?

Retail deposits increased by $107.8 million, totaling $888.4 million as of June 30, 2022.